647915
Description
Mind Map by seth.bragg, updated more than 1 year ago
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Created by seth.bragg
almost 11 years ago
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What is a business?
- A business is any
organisation that
makes goods or
provides services
- Many types of business exist in the
UK ranging from small firms owned
and run by one elf employed
person to large companies which
employ thousands of staff the world
over
- A business start up is a new firm
operating in a market for the first
time
- The majority of
businesses are very
small and operate in the
service sector
- A business start up is a new firm
operating in a market for the first
time
- Goods are physical products
- Services are non-physical items
- Customer needs are the wants and
desires of buyers
- A business buys the products they
need form suppliers and sell to
customers
- An individual person who
uses the product is called the
consumer
- Business sell their product to
customers in markets; any place
where buyers and sellers meet
to trade products
- Business sell their product to
customers in markets; any place
where buyers and sellers meet
to trade products
- Businesses are likely to be in competition
with other firms offering similar products
- An individual person who
uses the product is called the
consumer
- To create goods and services,
businesses need to buy or hire
inputs such as raw materials,
equipment, buildings and staff
- These inputs are turned
into outputs called products
- A business adds value
when the selling price of
an item produced is higher
than the cost of all the
resources used to make it
- A business adds value
when the selling price of
an item produced is higher
than the cost of all the
resources used to make it
- These inputs are turned
into outputs called products
- Many types of business exist in the
UK ranging from small firms owned
and run by one elf employed
person to large companies which
employ thousands of staff the world
over
- Sectors; the three types of
industry in which firms
operate
- Primary: the
acquiring of raw
materials such as
fish from fishing,
milk from farming,
coal from mining etc.
- Secondary:
manufacturing and
assembly
(converting raw
materials into
products)
- Tertiary: commercial
services supporting the
production and
distribution process, e.g.
insurance, transport,
advertising etc.
- The three sectors are very
much interdependent as firms
rely on other businesses in
different sectors
- Primary: the
acquiring of raw
materials such as
fish from fishing,
milk from farming,
coal from mining etc.
- The setting up of
a business is
called enterprise
- An individual who
sets up a
business is called
an entrepreneur
and does it for the
following motives
- Making a profit
- The satisfaction of
setting up a successful
business and being
independent
- Making a difference
- Making a profit
- New businesses start out
with few customers and are
likely to face competition
- To be successful, new
businesses need to create a
competitive advantage over its
rivals by offering a product that
customers prefer to a rival's
product
- To be successful, new
businesses need to create a
competitive advantage over its
rivals by offering a product that
customers prefer to a rival's
product
- Setting up a business involves
risks and rewards; the reward
being profit
- If losses or not enough
profit is made an owner
may decide to close the
business
- If losses or not enough
profit is made an owner
may decide to close the
business
- Many businesses have
limited resource and find
research costly
- Lack of planning and
reliance on gut instinct
often leads to business
failure
- However, a business plan is
a report by a new or existing
business that contains all of
its research findings and why
the firm hopes to succeed
- Contents of the
business plan may
include the results of
market research and
competitor analysis
- By doing this, owners are forced to
think about their aims, competition
and financial needs helping to
reduce risk and reassuring
stakeholders, such as banks
- Contents of the
business plan may
include the results of
market research and
competitor analysis
- However, a business plan is
a report by a new or existing
business that contains all of
its research findings and why
the firm hopes to succeed
- Lack of planning and
reliance on gut instinct
often leads to business
failure
- An individual who
sets up a
business is called
an entrepreneur
and does it for the
following motives
- Competitive and changing
markets
- Attracting customers
requires making products
seem superior to that of
their rivals
- However rivals are likely to be at work
on creating new products or
improving operations to reduce costs
and drive down prices
- Businesses are constantly needing to adapt their
products in accordance to ever changing trends
and customer needs; success today is no guarantee
of future profits
- However rivals are likely to be at work
on creating new products or
improving operations to reduce costs
and drive down prices
- A competitive
market will have
many businesses
trying to win the
same customers
- A monopoly is either the
only supplier in the market
or one with more than 25%
of the market
- Competition can make markets better by improving:
- Price
- Product range
- Customer service
- Price
- Attracting customers
requires making products
seem superior to that of
their rivals
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